Case Study

Streamlining the underwriting process

To match Reliance Life Insurance’s surging growth and to systemize their underwriting process, automation in the form of Savvion BPM was brought in. Renuka Vembu on the multiple advantages they gathered by way of this solution

Reliance Life Insurance (RLIC) is growing at a stupendous pace, with over two million policies in place, and they wanted to balance this growth with proper infrastructure as well. Their initial infrastructure, for handling their scaling operations, included four stand-alone systems—Life Asia, which ran on an AS/400, which was their core business engine. They also had a document management solution, an auto underwriting engine called Insure Connect (INSC), and a policy tracking system. However, working on these disparate systems meant that RLIC was devoid of a formal system to handle the steps involved in underwriting—receiving submissions, analyzing data, and providing approvals.

Their job routine and the ad hoc functioning forced the insurance policy underwriters and application process agents to manually collate all the information they needed, from different sources like large paper files, analyze the data collected, and determine whether the customer should be dispersed with the loan amount, and if yes, decide on the premium rates accordingly. The lack of visibility of the end-to-end process resulted in prolonged underwriting work, which was ridden with errors and in turn took a long time, about two weeks, for completion.

The initiation

The problems RLIC encountered was multi-fold. Absence of an automated process resulted in a slowdown in the productivity rate and impacted quality, and also delayed the chances of booking revenues readily. This prompted them to search for a solution that could enhance process control and reduce the average underwriting turn-around time (TAT) from weeks to hours. Mohan Chandrasekaran, CTO, Reliance Life, explained, “We were on the look-out for a solution which gave us the scalability to meet our future needs and the flexibility and agility to react to changing market conditions and support new products and markets as well.”

To address these issues and streamline the process, RLIC initially opted for a workflow application based on document management system, but it had limited scope when it came to scalability and functionality. The workflow application lacked flexibility in adapting to the company’s frequent changes in their insurance offerings and product mix. It also had its limitations in providing out-of-the-box reporting capabilities.

Time for change

In 2007, RLIC embarked on a company-wide business process management (BPM) initiative, which led them to reflect on Savvion and its comprehensive BPM suite that could support enterprise-wide deployment. After a preliminary evaluation, they finalized on Savvion, in July 2007. A team of five experts from Savvion worked with a project manager and operations manager from RLIC to define and understand their requirements and the nuances of the entire underwriting process. Now, with the help of this tool, the documents, information, and tasks are passed on from one participant to another based on assigned roles and a predetermined set of procedures together with defined business rules and an

escalation process. RLIC provided the business expertise while Savvion came in with their technical expertise.

Chandrasekaran mentioned, “During the implementation stage a major issue surfaced. The Operating System Savvion ran on, limited the number of application files that could be stored within one folder. We thought that we would have to go back to the drawing board. However, Savvion Support provided a product update that eliminated the problem and the project quickly resumed.”

Project details

The Savvion solution went live in January 2008, and is inclusive of Savvion Process Modeler—a business process modeling tool for business users, Savvion BPM Studio—a development environment for more technical users, and Savvion BusinessManager. As explained by Chandrasekaran, the underwriting process now begins when an application process agent arrives at the branch and scans the application form along with the supporting documents and uploads them to the document management server.

This triggers the process, which retrieves the document and allows agents to view it electronically in the document management system along with other business metadata. After the agent validates the information and enters the required inputs, the data is updated on the document management system. This data is used to send as an underwriting and policy issuance request to INSC to process the response, which then automatically generates and sends an email notification based on business rules. Proposal forms and other documents are exported to a central system on completion of issuance activity. The policy tracking system (PTS) is also updated during various milestones in the process.

Benefits garnered

Savvion has resolved some of the gravest underwriting issues confronting them. They have significantly reduced the TAT from two weeks to a single day now. This has ensured the lag period to shrink and hence tasks are not dropped/affected. Instead of silos, there is now one integrated platform. Automated process has also erased the inaccuracies that emerged earlier. This not only improves productivity but also enhances customer service as well. Adding to this, Chandrasekaran said, “Savvion also answered the need for scalability. The solution easily supports 900 concurrent users and volumes of up to 10,000 new policies per day during the peak season of January through March. And it can accommodate new types of policies within two to three weeks.”

They have gained not only in the technical aspect, but also in bringing down operational costs. They have a decentralized workflow model in place. Earlier there was one BPO vendor but now there are 12 processing hubs who handle the localized content and data entry thereby improving the productivity and service delivery.

Anasuya Ghosh, Chief Underwriter and Head of New Business, RLIC, said, “The things we fear most in organizations—fluctuations, disturbances, imbalances—are the primary sources of creativity. This holds true for the Savvion BPM module and Insureconnect as it has helped us defeat this fear by re-defining, re-engineering and confluencing innovative process solutions with technological improvements.”

People and skepticism

RLIC faced initial skepticism as people were privy to and wary of automation replacing the manual mode. But soon they realized that it would create and add value for themselves and the back-office team. After buy-in from the senior management, they were geared for and embraced the change.

RLIC has a full-fledged team of train the trainers who assist staffs who need help or hand-holding. They also have a production support team in place and a 16-hour helpline. Trainings are provided in classrooms and on the job.

They are still working towards working newer ways and re-engineering to bring down the operating costs to the tune of $5 million.

renuka.vembu@expressindia.com